Industry superannuation fund-owned bank ME is working with one of its super fund partners to develop a shared equity mortgage and is working towards launching it early next year.ME is also working on a product "in the reverse mortgage space".ME chief executive Jamie McPhee said the big challenge for home buyers was affordability and ME could see opportunities to work with its super fund partners on solutions.McPhee said: "We are in discussions with a fund on a shared appreciation mortgage. We would do the banking and the fund would provide the equity."Shared equity mortgages started to appear in Australian about a decade ago but the emerging market was wiped out by the financial crisis. In a typical shared equity mortgage arrangement, the homebuyer would borrow against 60 per cent of the equity and an investor would hold the balance. This lowers the entry cost for a first-home buyer. When the house is sold the proceeds are split according to the equity share.Developing new mortgage products is one of the ways ME is working to deepen its relationships with its industry fund partners. In other initiatives, a number of funds now offer their members co-branded credit cards issued by ME.ME has member benefit programs, where funds offer their members mortgage rate discounts, bonus rates on savings accounts and other benefits.And it runs financial literacy programs in workplaces.McPhee said ME had been stepping up these programs since the completion of its five-year core banking upgrade. He said ME had a banking system that allowed it to be much more flexible with product features and pricing and thus able to target different segments.The bank issued the highlights of its 2015/16 financial result yesterday, reporting underlying net profit of A$74.7 million - a 29 per cent increase over the previous year.Assets grew six per cent to $24.7 billion and the net interest margin was stable at 1.55 per cent.ME's cost-to-income ratio fell 270 basis points to 65.8 per cent. Its return on equity rose 80 bps to 8.2 per cent.The home loan portfolio grew by around five per cent to $20.3 billion and customer deposits grew by 19 per cent to $10.5 billion.McPhee said he was targeting strong growth in settlements in the current year - again as a result of the flexibility allowed by the new core banking system.Customer numbers were up eight per cent to 365,520.